Playing with numbers to judge valuation.
Sona B last 3 years doubled revenue and 2.4 x increase in PAT.
Order book in healthy, TAM is big and good management - can expect 2x revenue and 2.25x EPS growth.
CFO in recent CNBC inverview indicated that they can able to grow revenue by 25% cagr (2x in 3 yrs).
Current PE is 69 and EPS is 8.82
If we consider EPS to grow 125% in 3 years than EPS will be 20.
If we consider stock price to grow 15% CAGR than, it will be 937 at end of 3 years. With 20 EPS and 937 price the PE will be 47.
That as per me fairly to highly valued for 20% CAGR company (Considering growth will slow down after 3 years).
My status is hold. Views will change to negative if growth will slow, positive for good acquisition.
Disc: Invested in past with average price at 498.
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